Privy Council.

Lord Keith of Kinkel, Lord Jauncey of Tullichettle, Lord Mustill, Lord Nicholls of Birkenhead and Lord Hoffmann.

Judgment delivered 3 October 1995.

Income tax – Liabilities to be taken into account in computing chargeable profits – Vehicles sold with warranty to correct defects in material or workmanship manifesting themselves within 12 months – 63 per cent of vehicles known to have defects – Whether projected liability under warranty deductible in accounting year when vehicles sold – Income Tax Act (New Zealand) 1976, s. 104.

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